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How to write a TOIL policy
A time off in lieu policy does not need to be long. It needs to answer eight questions clearly enough that nobody has to interpret it under pressure. Below are the clauses, then a template you can copy and adapt.
The eight clauses
1. Who it applies to
Name the roles or grades covered. Employees whose contracts already pay overtime, and those legally entitled to premium pay, may need to be excluded or treated differently.
2. What counts as overtime
Hours worked beyond the contracted schedule, at the employer's request or with prior approval. Say explicitly whether hours an employee chooses to work unprompted count — this single sentence prevents most disputes.
3. Prior authorisation
State that overtime should be approved before it is worked, and name a fallback for genuine emergencies (for example, retrospective approval within 48 hours).
4. Conversion rates
List which situations attract which multiplier. See the conversion guide for the arithmetic.
5. Recording
Name the system of record and who enters what. A policy that says "keep a note of your hours" is a policy that will fail.
6. Taking the time
Notice required, whether part days are allowed, whether TOIL can be attached to annual leave, and the grounds on which a request may be refused — with a requirement that refusals are given in writing with a reason.
7. Limits and expiry
A maximum balance and a use-by window, if you want them. Be honest about capacity: if the team cannot release people, an expiry rule is a pay cut in disguise. A common compromise is that any balance above a threshold is paid out rather than lost.
8. Leavers
What happens to an unused balance on resignation or termination. In many jurisdictions accrued time has monetary value and must be paid out — check your local law.
Template
Time Off in Lieu (TOIL) Policy — [Company name]
1. Purpose. This policy sets out how additional hours worked by employees are converted into paid time off in lieu of overtime payment.
2. Scope. This policy applies to [roles / all employees except those on contracts providing for paid overtime].
3. Definition. TOIL is paid time away from work granted in place of payment for hours worked beyond an employee's contracted hours.
4. Authorisation. Additional hours must be approved by the employee's manager before they are worked. Where this is not possible due to an operational emergency, the hours must be submitted for approval within [48 hours].
5. Conversion. Approved additional hours are credited as follows: weekday hours at 1:1; Saturday, Sunday and unsocial hours at 1.5x; public holidays and emergency call-outs at 2x. The applicable rate is confirmed at the point of approval.
6. Recording. Employees record additional hours in [system] on the day they are worked, or by the end of the following working day. Managers approve or decline each entry, and declines include a reason. The balance shown in [system] is the definitive record for both parties.
7. Taking TOIL. Requests are submitted through [system] with at least [5 working days'] notice, except by agreement. TOIL may be taken in units of half an hour or more, as full or part days. Requests will be granted wherever operationally possible; a refusal will state the reason in writing and the manager will propose an alternative date.
8. Limits. The maximum balance an employee may hold is [40] hours. Hours must be taken within [3 months] of being earned; where operational demands have prevented this, the balance will be [extended by agreement / paid at the employee's normal hourly rate] rather than lost.
9. Leavers. Any unused TOIL balance on the date employment ends will be [paid at the employee's normal hourly rate / taken during the notice period by agreement].
10. Review. This policy will be reviewed annually and may be amended with [one month's] written notice to employees.
Signed: ______________________ Date: ____________
This template is a starting point for discussion, not legal advice. Employment law on overtime and time off in lieu varies considerably by country, sector and employee classification — have your policy reviewed against your local rules before adopting it.
Putting it into practice
Once the policy is agreed, the administration is what determines whether it is honoured. TimerOff implements exactly this structure: employees log hours, managers approve with a conversion rate, balances are visible to both sides, and requests carry approvals and written reasons. Read how it works or start with the FAQ.